Tag Archives: Syria

Stealth Wealth: ISIL and the Myth of Oil

The Islamic State of Iraq and the Levant (ISIL) has established itself as an extremely powerful jihadist army in the heart of the Middle East. The group is well armed, commanding a vehicle fleet that includes 2300 High Mobility Multipurpose Wheeled Vehicles (HMMWV) and countless others along with enough weaponry and soldiers to manage a “state” of 300,000 square kilometers (roughly the size of Italy). ISIL is not just powerful, it is well funded. The group is reportedly so wealthy some members of the United States Government, without any apparent fear of hyperbole, repeatedly describe ISIL as the “best funded terrorist group in history” with oil as its main source of affluence.

The narrative is an attractive one. A wealthy terrorist group is novel and alarming. Fighting it requires new methods, new powers, and indeed new budgets. But it seems infeasible for the so-called Islamic State to accumulate wealth by selling functionally useless crude oil or poorly-refined petroleum products a truckload at a time. Survival alone must be very expensive indeed while under constant armed assault by a US-led coalition of 65 countries, along with Syria, Russia (arguably), Iran, and countless rival groups including the very capable Hezbollah. This gives credence to reports that some Sunni Arab states (allies of the United States) look the other way while their prominent citizens support the group.  Whatever the case, the mainstream media seems unwilling to question the narrative of ISIL’s oil riches.  The numbers however, do not support this idea.

Unbalancing the Books

Estimating ISIL’s oil revenue is complex and based largely on assumptions and derived intelligence but is useful for making the point that the group will have great difficulty profiting from the sale of stolen petroleum.

A generous estimate put ISIL’s February 2015 production capacity at 50,000 barrels per day (bpd). With a market price of $10 a barrel according to one Iraqi official, ISIL could theoretically make $15 million a month. But there is more to the story. ISIL does not control a single pipeline from origin to destination meaning they require 181 standard tanker trucks just to move all that oil, a very inefficient and expensive transportation method. Standard trucks of this type would require roughly four barrels of diesel just to make the 800-mile round trip from Kirkuk to Raqqah. That is 724 barrels per day ($217,000 per month) just to deliver to potential customers.

But ISIL needs fuel as well. A large percentage of ISIL’s estimated production would be consumed by 2300 HMMWVs, hundreds of armored vehicles, likely tens of thousands of civilian cars and trucks, heavy machinery for construction and survivability, generators, and heaters. With only about 70% of refined petroleum products useful for those purposes, ISIL’s for-sale inventory is down to somewhere in the neighborhood of 30,000 bpd. Subtract another 10% for likely corruption, loss, fuel contamination due to mishandling, and inefficiencies from distributed and improvised refining, that is 27,000 bpd before accounting for a single action by any of ISIL’s many enemies.

The Myth of ISIL's Oil
“Crude Stills:” A field refinery used by ISIL to process crude oil into useable forms such as diesel and kerosene.

All the same, 27,000 bpd is worth $8.1 million per month; not a paltry sum, but a far cry from the $50 million bonanza the United States estimates ISIL earns monthly from oil sales. It is also only one half of the equation. Though ISIL’s monthly expenditure is beyond the scope of this article, we must remember that its army of tens of thousands of soldiers is a very expensive commodity to operate. Those soldiers must be recruited, fed, paid, housed, equipped, armed, and trained. The wounded require expensive medicines to heal or keep healthy and their families must be compensated upon their deaths. If we compare these priorities with appropriation titles in the budget of the United States Army, we find that similar expenses account for 91.8% of the total US Army budget. Assuming ISIL has similar combat priorities, it is clear $8.1 million will not go very far.

Groupthink, Bureaucracy, and Confusion

If strained production capacity, distributed and inefficient refining, expensive distribution infrastructure, extremely high operating costs, and a questionable customer base are not enough to break ISIL’s bank, enemy action certainly will.  Unfortunately, there is a political rUntitledeason we keep hearing tales of the group’s fabulous riches. Since the Obama Administration began perpetuating the myth of ISIL’s oil wealth in August 2014, bureaucrats and generals have used the idea as a foundation for action. As early as September 2014, the Department of the Treasury sought authorities to target ISIL’s bank accounts and those of its financial backers while the State Department lobbied to block donations to ISIL from  citizens of Gulf Cooperation Council countries. Meanwhile, the Pentagon went after the group’s oil infrastructure, most notably in an effort to retake the Bayji refinery complex. Though this seems a refreshingly comprehensive approach to a complex problem, these agencies carried it out in the context of bureaucratic competition, particularly when diplomacy constrained military options or when bombing annoyed regional allies and complicated negotiations over the Iran nuclear deal. Yet amid the bureaucratic maneuvering, none were willing to question the attractive but invalid assertion that ISIL was making a lot of money…Until Vladimir Putin agreed with them.

Following the downing of a Russian fighter aircraft by the Turkish Air Force, Russia produced photo evidence accusing Turkey of being the primary consumer of ISIL’s stolen oil.  The Russian photos even implicated the family of Turkish President Recep Tayyip Erdogan in the trade. Despite their ambiguity, the allegations are troublesome for the mantra underpinning the policies of the United States, NATO, Turkey, and a number of other outwardly anti-ISIL stakeholders. The response from the United States came from special envoy and coordinator for international energy affairs, Amos Hochstein, who said that ISIL’s oil sales to Turkey are of “no significance from a volume [or revenue] perspective” and that most consumers are in ISIL-controlled areas of Syria and Iraq. Bizarrely, other US officials even questioned ISIL’s production capacity, pointing out that the group refines its stolen oil in “ad hoc desert pits equipped with crude stills”. Suddenly Washington was further complicating an already confusing policy by qualifying its previously bold statements about ISIL’s oil wealth.

The Cost of the Myth

Maintaining the myth of ISIL oil wealth was always an operational liability, incorrectly informing policy and improperly shaping decisions on the use of national power. It is now clear the tortured logic required to maintain the fiction is an international political liability as well and it is time for the United States and its allies to face facts and abandon the groupthink. ISIL is not enjoying a massive windfall from the sale of oil and instead is waging a successful war with more intractable sources of funding including possible covert sponsorship from some of America’s less scrupulous Sunni allies. Until Washington is willing to face the reality of ISIL’s oil wealth, those “allies” will enjoy political cover to support the Islamic State and Mr. Putin will continue to use America’s own rhetoric against it.

Lino Miani

Lino Miani is a retired US Army Special Forces officer, author of The Sulu Arms Market, and CEO of Navisio Global LLC 

What About Serbia?

As the catastrophic Syrian civil war carries on, the exodus of refugees into Europe has become a security issue, creating a crisis that has become dangerously divisive within the EU – and has left hundreds of thousands of refugees within Serbia’s borders. But, there is more to it. This crisis has the potential to either supercharge or undermine Serbia’s domestic and foreign policies by becoming domestically divisive or altering its EU accession potential.

This gives rise to an extremely important question the EU must ask itself – what about Serbia?

Refugees in Gazelle Park, Belgrade, Serbia
Refugees in Gazelle Park, Belgrade, Serbia. Photo: Tanjug/Zoran Zestic

As Nick Avila wrote in “Flashpoint Europe: The Refugee Crisis and the Fate of the Union,” Syrian refugees are increasingly using travel routes through the Balkans since the cessation of Operation Mare Nostrum. These routes have been of critical importance since antiquity, being used for trade and war between two mighty continents. Therefore, the Balkans have always been considered on “the crossroads” between them – a coveted geostrategic location that has given it a tumultuous past, including 500 years of foreign occupation by multiple empires.

But Serbia is now on the crossroads in terms of the migration crisis. In the geographic sense, this is obvious. However, in an ideological sense, Serbia finds itself in a liminal state between the EU’s “community of values” and rationalist security paranoia of its members on the periphery. Sonja Licht best summed up this sentiment in her appeal to the EU given at the 2015 Belgrade Security Forum:

The EU is witnessing the 21st century’s first large migration wave moving towards its borders. This influx of people has forced countries on its Balkan route to manage hundreds of thousands of desperate, destitute people. Not yet EU members, these countries met the task with humanity and relative efficiency – only to find out that some EU countries had suspended the principles of human rights and other basic values that the Union is built upon. The image of the EU as a community of values with high standards of human rights protection is seriously undermined.

Setting the Security Stage

Currently, the EU’s Balkan periphery states are treating the influx of migrants as a threat to their social and economic sectors. This has come about in large part by institutionalizing post-war “securitizations.”[1] To clarify, after WWII, Europe “securitized” itself in order to prevent another war. This meant the creation the European Coal and Steel Community – the forerunner of the EU. Along with NATO, this secured Europe during the Cold War. However, this strategy was disrupted by the disintegration of Yugoslavia, which significantly traumatized both the Balkans and the EU. From a liberal perspective, the chaos that unfolded in the 1990s highlighted the EU’s inability to mobilize and act internationally in the name of its liberal core values.  From the rationalist perspective, it highlighted an inability to protect regional stability at its borders.

This trauma intensified and expanded Europe’s institutionalization of security in the social, political, and military sectors. More specifically, these considerations led Europe to “securitize disintegration,” and adopt a policy of “universal values,” eastward expansion, and integration. It even led to “the European pillar” of NATO – the European Security and Defense Identity (ESDI).[2] With all of this in mind, it becomes clear why and how EU members became so security-focused.

Serbia’s Move to Europe – a Delicate Balance

Serbia’s move toward Europe has not been easy, in large part because of deep-rooted domestic political divisions. These divisions, combined with Serbia’s international role in the migrant crisis, have created a delicate balance which, if disturbed, could lead to significant European consequences. This balance has two main facets – the “us/them” dynamic and security divergence.

"Bulldozer Revolution" Belgrade, Serbia 2000. Image Source: www.suedosteuropa.uni-graz.at
“Bulldozer Revolution” Belgrade, Serbia 2000. Image Source: www.suedosteuropa.uni-graz.at

First, there exists a delicate balance with regard to  the “us/them” relationship between Serbia and the EU. Even after the NATO air campaign, Serbia has made it a priority to move towards a stable, modern Europe, thus reducing the “us/them” gap. Serbia has arguably been on this path since October 2000, when the “Bulldozer Revolution” symbolized a popular intolerance of totalitarianism, communism, aggression, and violation of human rights. This is not to say that nationalists stood by; they put up a fight to widen the gap between Serbia and Europe, and the two primary discourses in Serbia – the nationalist-liberational  and the civil-democratic (pro-EU), became deadlocked.[3] This became readily apparent in 2003, when Dr. Zoran Đinđić, the “first democratic prime minister,” was assassinated for his pro-EU reform agenda and his abrupt extradition of Milošević to The Hague in 2001.

In 2008, the pendulum arguably swung in the direction of Europe when Serbia reelected Boris Tadić as its president, and his coalition won a victory soon after in the parliamentary elections. However, due to recent delays in Serbian EU-accession, the Greek financial crisis, and the EU’s proclaimed “enlargement fatigue,” the nationalist-liberational discourse has been gaining momentum, swinging the pendulum away from Europe.  According to the Serbian Office for EU Integration, public support for EU membership fell from 72% to 51% between 2003 and 2012.[5]  Similar numbers were shown by other polls, including one done in 2014 by the EU Delegation to Serbia and Medium Gallup.[6]

However, the “us/them” dynamic isn’t the only complicated balance. The second one is a divergence in terms of security. Instead of moving closer to Europe’s culture of securitization, Serbia has been prodded along the path of desecuritization. Sanctions, war crimes tribunals, and international isolation have pushed Serbia to abandon nationalism and accept responsibility for the breakup of Yugoslavia. Furthermore, EU accession requirements have driven desecuritizations with regard to minority rights, normalization with Kosovo, and economic privatization.

This divergence of securitization and desecuritization has led to a emphatic conflict between the liberal universalism sold by the EU and the massive border securitization/nationalist bickering among EU member states. More problematic is the deportation and isolation of refugees in Serbia by EU neighbors who have rebuked Serbia for ethnic intolerance in the past. Some Serbs find this hypocritical.

Image Source: www.balkanmagazin.net/
German Chancellor Angela Merkel and Serbian Prime Minister Alexandar Vučić. Image Source: www.balkanmagazin.net/

Upsetting the Balance

So, what does this mean?  It means that people in Serbia are already on the fence collectively with regard to EU accession, and as time progresses, the EU loses supporters within Serbia. This negatively upsets the political balance in Serbia, but so far not too severely. However,  the bickering and the closing of borders with Serbia by EU members as a result of the immigration crisis, further endangers the balance by (1) exacerbating the “us/them” dynamic between Serbia and the EU and (2) emphasizing an ideological tension with regard to security and values.

Along with added political peril, however, this situation also provides opportunity and political capital for both Serbia and the EU. For instance, as early as December, 2014, according to the UN Refugee Agency, Serbia was already dealing with over 270,000 “population of concern” as a result of the crisis.  In response, the Commissioner for European Neighbourhood Policy & Enlargement Negotiations, Johannes Hahn, praised Serbia for treating the refugees “with dignity, in line with international standards.”[7]  This is a change in tone from the same man who announced last September that “enlargement fatigue” would prevent Serbia from joining the EU for at least five more years due to “technical issues.”

The Potential

Serbia’s involvement in this matter is a more than a technical issue, and it will likely influence Serbia’s EU accession. Therefore, the migration crisis connects Serbia urgently to European Union security politics. In other words, the attraction of the EU is waning in Serbia’s view, and the degree of how well (or poorly) Serbia is supported during this crisis will influence the degree of Serbia’s impact on European affairs.

That being said, Serbia’s positive reaction to this crisis represents an enormous bargaining chip with potential to influence its accession negotiations and possibly re-prioritize or hasten them. It also gives Serbia political leverage when dealing with its regional neighbors on a bilateral basis. Serbia is even better-positioned considering its current chairmanship of the OSCE. The elites in Serbia are proven rational actors, so it should be expected that they will immediately translate Serbia’s goodwill and emphasis on humanitarian assistance into political capital domestically, regionally, and throughout Europe.

Conversely, if Serbia misses this opportunity to leverage its political capital with regard to its handling of the refugee crisis, the nationalist-liberational discourse will continue to gain momentum by selling the crisis as another instance of abuse by the West. Serbs are already frustrated with changing conditions regarding EU accession, and lack of support on the part of Europe could push the Serbs away. This is a security risk in multiple sectors, both for Serbia and the EU. If Serbia is forced to face this risk alone, it will potentially seek resolutions eastward, (and already-degraded hopes for a re-emergence of positive OSCE influence might be undermined).  According to the Serbian President, Tomislav Nikolić, “Serbia cannot resolve this issue, and Serbia is not the migrants’ final destination, but only a transit country…that the migrants do not want to stay in Serbia because the country does not have enough jobs even for the people who were born in it… [t]he EU has now been put to the test.”[8]  The Serbian Prime Minister, Aleksandar Vučić, has echoed a similar tone, hinting at relations with the East: “We seek to join the EU, to achieve its standards, but also to preserve our good relations with Russia…”[9]

What About Serbia?

So, again, what about Serbia?  The specific answer remains to be seen.  Europe has spent the post-WWII years securitizing in order to protect its sovereignty and its values, but this institutionalized security culture has now collided head-on with those values, leaving a desecuritized Serbia in a unique position. There is no question that this crisis represents a potential watershed event with regard to Serbia’s political future, both domestically and internationally, but at a tertiary level, this delicate situation represents a significant turning point for European security policy.  Even President Obama and President Putin have recognized this at the UN General Assembly, highlighting Serbia’s position and importance. When thought of this way, the consequences for Serbia take on a greater level of significance.

73168cd066559e66aab3731161dd1eb563215fb59c09836af9cd8b65e82f0bfc

MAJ Michael Anderson is a U.S. Army Armor Officer with extensive combat and humanitarian experience with the 82nd Airborne Division’s RSTA units and a 2013 Olmsted Scholar in Belgrade, Serbia. He received his B.S. in Electrical Engineering from USMA in 2004 and his M.A. in International Security from University of Belgrade, Serbia in 2015.  The views expressed here are his own and not those of the US Army or the George and Carol Olmsted Foundation.

[1] “Securitizing,” in the non-financial sense, is to frame an issue as an existential threat to some highly-coveted referent object.   Securitzations occur throughout a linked series of sectors, including social, economic, and military.  In the case of immigration, the referent object is usually cultural identity or economic stability.  See Security: A New Framework for Analysis (1997) by Buzan, Wæver, and de Wilde.

Also, this article will not delve into the Iraqi or Syrian power vacuums or their causes – that merits a separate analysis.

[2] The ESDI has evolved as a way for Europe to decisively intervene internationally without NATO, and is now known as the Common Security and Defense Policy (CSDP).

[3] See “Security, Culture, and Identity in Serbia” (2007) by Filip Ejdus.

[4] Ejdus, “Serbia, Culture, and Identity,” 47.  Originally, the nationalist-liberational discourse is a product of the 500-year struggle to free Serbia from occupation and imperialism.  More recently, it has asserted general disdain through polemics against the EU, NATO, the West, and the US.  On the other hand, the civil-democratic discourse in Serbia is newer, rooted in political freedoms, respect for human rights, democratic values, and shared identity with Europe.

[5] “Podrška građana članstvu u EU pala na 57 odsto – Politika”.

[6] “Serbia: 57 Percent of Citizens in Favor of EU Membership – Poll 

[7] “Migrants: EU, Commissioner Hahn in Serbia, Visits Centre

[8] “Nikolic: It is not possible to let migrants settle in Serbia permanently” 

[9] “Vucic: Obligations Will Only Change when Serbia Becomes EU Member State”

The Root of All ISIL?

There is a lot of soul-searching nowadays regarding the origins of the Islamic State of Iraq and the Levant (ISIL).  Historians and political scientists of all sorts have logged a lot of air time and print space answering the questions:  “How could ISIL have happened and where did these savages come from?”  Their answer is almost always a history lesson of the Iraq war with the occasional biopic on the Assad family thrown in for balance. Very rarely do they explore ISIL’s roots beyond that so there is something missing in the coverage.  While the post-2011 situation in Iraq undoubtedly led to the conception and birth of ISIL, let us remember that the group grew up in Syria.  For those of us paying attention then, our thoughts on the genesis of ISIL must inevitably turn to the Arab Spring and its mishandling by the Obama Administration and others.

Are the White House's failures at the roots of ISIL? Tahrir Square protesters communicate the scope of the problem.
Are the White House’s failures at the roots of ISIL?  Tahrir Square protesters communicate the scope of the movement in 2011.

Leading from Behind

We all know the mixed history of the Arab Spring.  On one hand it promised to liberate political thought in the Middle East from its despotic modern history but on the other led to the jarring realization that Islamism may indeed come to US allies like Egypt through the ballot box.  The Obama Administration should have learned a lesson from the electoral victory of Hamas but instead meekly transmitted mixed messages of support for America’s distasteful but stable ally Mubarak.  On 11 February 2011, Egypt announced Mubarak’s resignation while other regional allies watched in horror as America abandoned the second-largest recipient of US military aid.  Four days later, as if on cue, violence erupted at Arab Spring protests in Benghazi, Libya, igniting the civil war that ultimately led to the ignominious downfall of Muammar Ghaddafi and the slow descent of the country into perpetual balkanized dysfunction.  Less than three weeks after the first shots were fired in Benghazi, Britain and France were rushing headlong into the fray, enforcing a no fly zone and bombing Ghaddafi’s forces on the ground.  To support this they waved the flag of humanitarian intervention but found themselves critically limited in two ways: by their own inability to sustain a protracted air campaign in Africa, and by the insistence of the Obama Administration to “lead from behind” and achieve victory through airpower.

UntitledIn what must be one of history’s most stunning examples of the costs of alliance politics, the United States very quickly found itself compelled to rescue its allies from spectacular failure in a campaign it was verbally supporting.  Constrained by the President’s refusal to lead from the front, the United States Military took the reins under the guise of a NATO intervention while the French and British happily withdrew to the familiar position of supporting a US-led military endeavor America never wanted and did not benefit from.  In Libya, the rest is history.  Freed from control of the Ghaddafi regime and armed by a flood of loose weaponry, groups like Al Qaeda in the Islamic Maghreb (AQIM) unleashed direct assaults on governments across northern Africa.  As I argue in “The Illusion of Suddenness“, The infectious cocktail of successful rebellion in Egypt and weaponry from Libya transformed another Arab Spring protest, this time in Syria, into a raging insurgency.  The stage was set for ISIL to come of age.

The Birth of ISIL

As the war in Syria intensified, the United States continued to display hesitation in its foreign policy.  With the Assad regime clinging desperately to survival, western governments began to grow concerned about the potential for its use of chemical weapons. At a 20 August 2012 press conference, the President of the United States, who seemed to have recovered from his earlier lack of conviction in regional affairs, delivered a clear and powerful deterrent threat to Damascus by drawing a “red line” against the use of chemical weapons in the conflict.   But as a string of mysterious chemical weapons began exploding in rebel-held neighborhoods in October of that year, the “red line” began to bend and eventually broke in August 2013 after the undeniable use of Sarin in the town of Ghouta.  Rather than use authority under the War Powers Resolution to defend the “red line”, the President sought and received a specific resolution from Congress on 6 September which, among other things, required him to use “all appropriate diplomatic and other peaceful means to prevent the deployment and use of weapons of mass destruction by Syria”.  In this he complied with further delay, announcing that air strikes could be averted if Syria were to give up its chemical stockpiles.  Sensing an opportunity, Russia sent its Foreign Minister to negotiate the handover, managing by his success to destroy what little deterrent credibility the United States had left in the region.

The Situation in Iraq on 8 August 2014
The Situation in Iraq on 8 August 2014

The ISIL assault on Iraq began predictably three months later with the fall of al Qaim in December.  By the end of February 2014, Fallujah and Ramadi, taken at such cost by American soldiers ten years earlier, were firmly in Islamist hands.  In June, ISIL attacked the Tigris river valley, taking Mosul on the 10th and Tikrit the next day.  By the end of the month, large formations of the Iraqi Army had been completely destroyed, Tal Afar was in ISIL hands, and both Syria and Iran were actively intervening in Iraq.  Even then, America held off taking action until ISIL’s slaughter of Yezidis in Sinjar and simultaneous advance on the Kurdish capital Irbil.  By this time, ISIL controlled all the major cities in the north and west of Iraq, the Kurds were on the verge of being shattered into four exiled refugee communities, Baghdad was surrounded on two sides, and Iran was intervening openly in the situation.  The specter of state on state sectarian war was becoming very real indeed as the buffer between traditional enemies Iran and Saudi Arabia was collapsing precisely as Washington’s resolve was in serious doubt.

A Silver Lining?

The chronology of this is as disheartening as it is hard to deny.  A series of American half measures, broken promises, and false threats is the real root of all ISIL in the Middle East.  Faced with nothing but bad options, the White House now finds itself fighting shoulder to shoulder in Iraq with its old enemy, the Quds Force. Meanwhile, Riyadh has felt compelled to build an independent coalition (read: without the USA) to wage open war against Iranian proxies on their Yemeni frontier leading to the possibility that once again, the United States will get dragged into a conflict it doesn’t want in order to rescue an ally from failure.  Egypt, Qatar, and the UAE have all conducted offensive military strikes against ISIL and Arab Spring-related forces in the last five years, and large rifts are developing between the United States and critical allies Turkey and Israel.  If there is a silver lining to the quickening foreign policy disaster in the Middle East, it is that the crisis has given Tehran and Washington an opening to start talking about the Iranian nuclear program.  One gets the sense however, that the rapprochement comes amid declining American leverage rather than the reverse.

Lino Miani

Lino Miani is a retired US Army Special Forces officer, author of The Sulu Arms Market, and CEO of Navisio Global LLC.